An innovation journey is a risk-taking endeavor into uncertainty for entrepreneurs that want to invent the future.
Companies are human organizations that often face resistance to innovation because humans are in general risk-adverse. Regardless of their differences in size, context and situations, organizations face many obstacles in their innovation projects. The most common pitfalls are lack of time, difficulty in articulating or communicating a vision, the weight of the structure, and fears.
1- How lack of time works against innovation initiatives
People often imagine startups as places where innovation occurs naturally. Intuitively, it’s easy to imagine the founders and employees of a startup working 24 hours a day to innovate.
Even startups struggle to find innovation time
Reality is partly different: in the startup’s creative flow, the first few moments are 100% devoted to finding the idea that will find fast traction in the market. But quickly entrepreneurs will spend a considerable number of hours building a business, and less and less time innovating on their product or service.
Building a company includes activities such as handling logistics, recruiting talent, identifying customers, developing content to establish the brand, seeking out investors, sitting down with lawyers, accountants, advisers, etc. The time that remains to install the best innovation practices is shrinking as the startup consolidates. Managing growth makes it even worse.
Tensions between daily operation and innovation time
The SME, although structured with identified departments in charge of various functions critical such as production, marketing, human resources, sales development, sees the pressure on productive time increase. Indeed, managers are torn between two conflicting needs to ensure the sustainability of their business: optimize day-to-day management and seek out sources of growth through innovation. Here again, the imperatives of productivity and profitability require that the entrepreneurs allocate most if not all of their resources to the satisfaction of existing customers for their actual offers.
Freeing up employees’ time to allow them to innovate is a financial risk that few SMEs are able to take without endangering the entire business. They see it as potentially unproductive time that will not provide tangible results in the short run.
Too many agendas involved
In large groups paradoxically, the lack of time often stems from the number of interlocutors involved in an innovation process. Beyond the resistance due to the structure (see point #3), succeeding in organizing the agendas of all stakeholders involved in the innovation process, from the CEO to the engineer, from R&D to sales, is a tour de force. The impact on the ability to innovate quickly is often negative: the objective of innovation being secondary to everyday tasks, it is relegated to the bottom of the list of things to do. Meetings or creativity workshops are shifted continuously, and the momentum diminishes.
Add to this the possible desire to integrate customers, subcontractors, or strategic partners in this innovation loop to seek more depth in the insights, and you get a timing puzzle that could discourage more than one.
2- How the lack of vision prevents innovation
Vision, and the intent to innovate, are easy resources to mobilize in business leaders. Yet, even the best-intentioned visionaries can face obstacles in their journey linked to difficulties in establishing or communicating a clear innovation vision.
Clarifying the vision
The CEO of an SME or large corporation knows that it is imperative to innovate, as the startups nibbling away market shares keep reminding them. But in which direction, in which new markets, with which new customer segments, with which new products or services ?
Making such decisions is easier when based on a customer-centric, validated learning process that keeps the needs of the consumer central to the new value propositions.
For startups, the problem is much the same. By definition, they operate in a context of extreme uncertainty: do customers need this solution? Do they have the maturity to understand it? Are they ready to pay to use it? Are there enough of them to secure the future of the startup?
At early stage of development, choosing a direction means dropping all other choices because they do not yet have the resources to pursue several paths in parallel. The risk posed by this choice can lead entrepreneurs to not be drastic enough. They will want to keep several prototypes in their production pipeline to solve several problems for different customer segments, which can lead to a blurry vision.
Fuzziness is an enemy of productivity: developers need to know which part of the overall product is linked to the piece of code they create, marketing need to know which angle to choose to write the content strategy , business development needs to identify which customers to contact and how to pitch the new solution to them, etc.
Communicating the vision
When the vision is clear and established, there is still the matter of communicating it. If it does not percolate to all levels of the company, the energy loss will be proportional to the level at which communication has stopped. I often meet companies where the will to innovate is asserted and the vision is clear: yet it doesn’t flow in the reality of the trades because the employees did not understand what is expected of them. A great guru of operational efficiency once said that the success of a project depends on 20% know-how and 80% knowledge. If the vision is not communicated clearly and in a way that is appropriate for the different strata of the business, there is a good chance that the project will not be as successful as the boss envisioned.
I have witnessed startup CEOs who never posted a development roadmap on the wall. Or who rarely held regular meetings with their employees to keep them informed of variations in this vision.
I met SMEs leaders who didn’t think to have meetings with departments other than marketing or R&D to explain the global vision and their expectations for each department.
How many large groups have articulated the innovation objectives for each level of responsibility, and have given adapted incentives to carry them out?
3- How the structure can weigh on innovation
Humans are wired to compartmentalize, to control their environment. As soon as they settle down in their positions, the employees “nest”, they create an intangible structure around them to feel safe in their jobs. Even in startups, where the weight of the structure is minimal (a few people in an office working within earshot of each other), the lack of collaboration quickly becomes an issue. These silos, still invisible at the early stage, hamper collaboration between professions, albeit a major source of insight detection and innovation.
Getting employees to work together when they are accustomed to operating in silos and jealously guarding their responsibilities is a major challenge. People tend to blame the other departments. A product launch does not meet the objectives? For those who developed it, the marketing is at fault, who did not understand the product. For marketing, it’s the salespeople’s fault, who set unrealistic goals to get their sell-in bonus. For the sale, it is the fault of the engineers, who have no sense of the customer. By nature, these professions are reluctant to collaborate with others because they often do not understand their constraints and their needs. Access to this understanding, to this pool of knowledge that each department has accumulated in its profession, is precisely where the richness of an innovation process lies. It is crucial to set up moments where silos fall, even temporarily. This allows to mobilize the wealth of insight from each service and pool them to bring out innovation paths. As a consequence, it generates value for the company and its customers.
In addition to these issues of collaboration between teams, there are other obstacles related to the size of the company.
- In a large company, employees are responsible for making the machine work while limiting the risks as much as possible. This is justified by the fact that the market and its environment are well mastered by the company, for which risk-taking is considered more dangerous than the optimization of the status-quo. Yet without taking risks, there can be no real innovation.
- The international dimension of a large group adds another level of complexity.
How to benefit from the expertise of each subsidiary in its market, from its knowledge of its customers and their needs? How to centralize this information and compare it with other realities in the field to bring out innovative offers ? The reflex of protectionism, communication difficulties, differences in culture at work, time difference, are all factors which reinforce the lack of cooperation between international subsidiaries.
4- Fears, the worst enemies of creativity and commitment
Human beings struggle all their lives against fears that hinder their thinking and acting, whether they are aware of it or not. The same is true in the case of innovation, where risk taking and uncertainty often thwart the search for new solutions.
Fear of failure
Probably the most distributed across hierarchical levels and company sizes, the fear of failure can dramatically cripple the best intentions. However, for more than 10 years, the thinkers of modern management have hammered that failure is necessary for learning in an innovation process. That it should be celebrated rather than reprimanded. Despite all this literature, how many companies sincerely welcome failure positively, without sanction or loss of credibility for the person who experienced it ? How many are the promoters of innovative projects who endured numerous failures, and are seen internally as pioneers of innovation rather than “losers”?
It is high time we changed paradigms, and vocabulary too. In the most recent innovation methods for example, the change in strategic direction enabled by learning from unsuccessful experiments is called a “pivot”. Not a failure.
Fear of reprisals
Sanctions can be a direct consequence of failure, or of a number of failures. Let’s be clear: failure is constructive when it offers a learning opportunity and takes the business away from a path that would have wasted time and money had it been pursued for too long. I do not include in this definition the failures due to the lack of professionalism or to the repetition of the same errors. The penalties are unfortunately often the same, whether in cases of incompetency or in the case of “pivot”. These sanctions are not always frankly announced, which makes the exercise of risk-taking even more dangerous. Many companies, having read management 2.0 books, have written on their walls: “We celebrate failure”, “We encourage risk taking”. The reality is often very different: severe annual evaluations, loss of bonuses, hierarchical demotion… The risk bearers quickly become black sheeps, and their reputation will follow them in the company.
Fear for future employability
The loss of internal reputation can quickly spread through the ecosystems in which the company gravitates: networks of startups, industries, professions, recruiters. The employees taking repeated risks (for the benefit of their employer, let us remember) can quickly lose their chances of finding another rewarding job. Often, they will either regret having taken so many risks and decide not to take any more or leave the company and embark on the startup adventure, where they will have to remain vigilant not to fall into any of the pitfalls identified above.
In today’s world, everyone knows that innovation will best guarantee the longevity of the company. It is necessary that this approach be framed to correspond to the needs of the customers and to the technological evolutions of the concerned industry.
There are many solutions to help companies integrate processes and a culture of innovation. Of course, it takes commitment, determination and courage. The good news is, business leaders don’t have to face these challenges alone: external experts can guide them through these rough paths. At Disruptive Agent, we help SMEs in the tech industry and startups find new avenues of growth with tailored innovation strategies and roadmaps, transform ideas into innovative products or services that go to market successfully, & recruit and retain talents by improving the company’s culture of innovation.
We help business leaders identify untapped needs from (un)known clients segments, design new offerings to address these needs, validate the desirability of these offerings with the target markets, launch small-scale pilot projects, establish an innovation roadmap, and create a solid business model to integrate as a part of their company.
Don’t hesitate to contact us if you feel that obstacles to innovation hinder your progress!
